Highlights
After slowing at the outset of the year, the national activity index -- led by manufacturing and employment -- is back at its expansion best, posting a 0.34 in April following a sharply upward revised 0.32 in March. The 3-month average is at 0.46 vs March's 0.23.

Production that includes a gain for manufacturing leads April's report, contributing 0.27 to April's index. Next with a 0.10 contribution is employment highlighted by the month's 2-tenth fall in the unemployment rate to 3.9 percent. Sales/orders/inventories made only a slight contribution while consumption & housing, reflecting monthly slowing in housing starts and housing permits, pulled down the index slightly.

This index still has a way to go before it begins signaling inflation risk, at least based on the Chicago Fed's methodology which has 1.00 as the overheating red zone. Note that revisions, given lagging data, can be extreme in this report with only 51 of 85 indicators included so far for April's initial reading.

Consensus Outlook
The consumer may have been quiet but April was a good month for the industrial sector and especially for employment as the unemployment rate fell 2 tenths to 3.9 percent. Forecasters see the national activity index coming in at 0.25 vs a modest 0.10 gain in March.

Definition
The Chicago Fed National Activity Index (CFNAI) is a monthly index that tracks overall economic activity and inflationary pressures. The CFNAI is a weighted average of 85 existing monthly indicators of national economic activity. It is constructed to have an average value of zero and a standard deviation of one. Since economic activity tends toward trend growth over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend.
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